Gass v. County of Allegheny, Pa., 03-2679.

Decision Date10 June 2004
Docket NumberNo. 03-2679.,03-2679.
Citation371 F.3d 134
PartiesHerbert S. GASS, Jr.; John Zitelli, an individual; Diane Zitelli, his wife; Jeff Corsello, an individual; Lynn Corsello, his wife; Michael Leahy, an individual; Domenic Dipilato, an individual; Anna Dipilato, his wife; Robinhill Development Company v. COUNTY OF ALLEGHENY, PENNSYLVANIA; Board of Property Assessment, Appeals and Review of Allegheny County; Kevin McKeegin, an individual; Patricia McCullough, an individual; Jerry Speer, an individual; James Skinzer, an individual; Deborah Baron, an individual; Frederick Valencenti, an individual Herbert S. Gass, Jr.; John Zitelli; Diane Zitelli;<SMALL><SUP>*</SUP></SMALL> Jeff Corsello;<SMALL><SUP>*</SUP></SMALL> Lynn Corsello; Robinhill Development Company, Appellants.
CourtU.S. Court of Appeals — Third Circuit

Robert A. Goldman (Argued), Pittsburgh, for Appellants.

Charles P. McCullough, County Solicitor, Caroline P. Liebenguth (Argued), Assistant County Solicitor, Isobel Storch Solicitor, Board of Property Assessment, Office of Allegheny County Law Department, Pittsburgh, for Appellees.

Before SLOVITER, RENDELL, and ALDISERT, Circuit Judges.


SLOVITER, Circuit Judge.

Appellants, property-owning taxpayers in Allegheny County, filed this suit asserting that the Allegheny County Board of Property Assessment, Appeals and Review (the Board) has adopted a policy, custom or practice in processing appeals from property tax assessments that violates their rights to due process. The District Court dismissed this action for lack of subject-matter jurisdiction because of the Tax Injunction Act, 28 U.S.C. § 1341. Because the Tax Injunction Act deprives federal courts of jurisdiction to review challenges to a state property tax system where the state provides a plain, speedy and efficient remedy, we will affirm the decision of the District Court.


Appellants, Herbert S. Gass, Jr., John and Diane Zitelli, Jeff and Lynn Corsello, Michael Leahy, Domenic and Anna DiPilato, and Robinhill Development Company, appealed their real property assessments in 2001 and 2002 to the Board pursuant to the procedures set out in Section 207.01, et seq. of the Administrative Code of Allegheny County. The Board's hearing officers held appeals hearings for each of the Appellants and made recommendations to the Board for final resolution of their tax liability. Appellants allege that the Board considered ex parte evidence regarding market values in making the final assessments.

On August 9, 2002, Appellants filed this action pursuant to 42 U.S.C. § 1983 in the Western District of Pennsylvania seeking a declaratory judgment that Appellees, the County of Allegheny, the Board and individual Board members,1 violated their due process rights by encouraging hearing officers to seek out ex parte evidence of market values and to consider such evidence after the hearings, without affording the property owners notice or the opportunity to respond to the new evidence. Appellants also claimed that hearing officers made arbitrary and capricious recommendations to the Board as to the assessed value of each of their properties.

The Board moved to dismiss the case on the ground that the Tax Injunction Act and principles of comity prevent federal courts from exercising subject-matter jurisdiction over a challenge to a state tax system. Appellants responded that although the Tax Injunction Act bars federal jurisdiction over challenges to a state's assessment, levy, or collection of property taxes, it does not bar challenges to a state's post-payment appeals procedures.

The District Court referred the motion to dismiss to Magistrate Judge Ila Jeanne Sensenich for a Report and Recommendation (R & R). Magistrate Judge Sensenich issued a thorough, well-reasoned report recommending that the District Court grant the Board's motion to dismiss for lack of subject-matter jurisdiction. She reasoned that if a federal court could award damages or declare a state tax system unconstitutional, it could halt the proper functioning of state government in a manner that was antithetical to principles of comity. Judge Sensenich thus rejected Appellants' asserted distinction between the taxing power and the appeals process. Finally, Judge Sensenich found that, in light of recent additions to Pennsylvania law, Pennsylvania's courts provide a "plain, speedy, and efficient" remedy through the process for appeal of tax assessments. The District Court adopted the R & R as the opinion of the court and granted the Board's motion to dismiss for lack of jurisdiction.

On appeal, Appellants argue that 1) the Tax Injunction Act does not apply to their challenge to Pennsylvania's post-payment appeals process; 2) even if the Tax Injunction Act applies to their case, the federal courts still have jurisdiction because Appellants lack a plain, speedy and efficient remedy at state law; and/or 3) the Tax Injunction Act is unconstitutional.


The Tax Injunction Act provides that "[t]he district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State." 28 U.S.C. § 1341. Although the express language of the Tax Injunction Act only refers to injunctive actions, the Supreme Court has held that the Tax Injunction Act also prohibits federal courts from issuing declaratory judgments holding state tax laws unconstitutional. California v. Grace Brethren Church, 457 U.S. 393, 408, 102 S.Ct. 2498, 73 L.Ed.2d 93 (1982).


Appellants' first argument is that the Tax Injunction Act does not apply because they have not asked the District Court to "enjoin, suspend or restrain the assessment, levy or collection of any tax." Appellants' Br. at 10 (quoting 28 U.S.C. § 1341). Appellants argue that they only challenge the post-collection appeals process, which does not implicate the Commonwealth's ability to assess, levy, or collect taxes as described in the text of the Tax Injunction Act.2

As noted above, Judge Sensenich rejected their attempt to distinguish their challenge from the type of challenge covered by the Act. She concluded that:

[appellants] ultimately [] challenge the methods used by the Board to assess property values (i.e., the Board improperly considers ex parte evidence regarding market values after the appeal hearings are concluded to determine assessment values) and not the appeal process itself. This is exactly the type of claim contemplated by Congress in enacting the Tax Injunction Act....

App. at 15. We agree. The appeal process is directed to the Board's ultimate goal and responsibility of determining the proper amount of tax to assess — a power of "assessment" that explicitly falls within the ambit of the Tax Injunction Act. Appellants' prior payment of the tax does not change the fact that they seek to enjoin Pennsylvania's finalization of assessments or re-assessments of taxes. Appellants' attempt to distinguish the appeals process from the tax assessment is unpersuasive.


The Tax Injunction Act divests federal courts of jurisdiction only if the state fails to provide a "plain, speedy and efficient" remedy in its court. Appellants argue that the federal courts have jurisdiction over this case because Pennsylvania has failed to provide a "plain, speedy and efficient" remedy at state law.

In determining whether the remedy in Pennsylvania courts is "plain, speedy and efficient," we are guided by the Supreme Court's decision in Rosewell v. La Salle National Bank, 450 U.S. 503, 101 S.Ct. 1221, 67 L.Ed.2d 464 (1981). In Rosewell, a taxpayer challenged Illinois' real estate tax refund procedure, which required taxpayers to pay the tax first and then attempt to contest the assessment and obtain a refund. The plaintiff in Rosewell refused to pay her tax assessments because they were set at a "discriminatory level." Id. at 518 n. 22, 101 S.Ct. 1221. The plaintiff filed a Section 1983 action and the defendants moved to dismiss for lack of jurisdiction. Because the Court found at the outset that the Tax Injunction Act "generally prohibits federal district courts from enjoining state tax administration," the Court focused on the question of whether Illinois provided an adequate state remedy. Id. at 512, 101 S.Ct. 1221.

In Rosewell, the Court construed "plain, speedy and efficient" to mean that a state court must meet "certain minimal procedural criteria," but it did not require that the state's remedy be the best, most convenient, or speediest one. Id. (emphasis in original); see also id. at 518-21, 101 S.Ct. 1221 (stating that two-year delay in state court, although regrettable, was not so egregious that it ran afoul of the Act's requirement of a "speedy" remedy). Congress' intent in requiring that the state provide a plain, speedy and efficient remedy was to ensure that the taxpayer be afforded "a full hearing and judicial determination of the controversy," id. at 513, 101 S.Ct. 1221 (quoting testimony of Senator Bone, 18 Cong. Rec. 1416 (1937)), and be able to appeal to the United States Supreme Court, id. (quoting S.Rep. No. 1035, at 2 (1937)).

In light of the Supreme Court's reluctance "`to interfere with the operation of state tax systems,'" and desire to" `be faithful to the congressional intent to limit drastically federal court interference with state tax systems,'" we have stated that "we must construe narrowly the `plain, speedy and efficient' exception to the Tax Injunction Act." Sipe v. Amerada Hess Corp., 689 F.2d 396, 404 (3d Cir.1982) (quoting Grace Brethren Church, 457 U.S. at 412, 413, 102 S.Ct. 2498).

We confronted a similar challenge to the one at bar in Behe v. Chester County Board of Assessment Appeals, 952 F.2d 66 (3d Cir.1991). Behe and other homeowners who claimed that Chester County violated their constitutional rights by failing to revise property assessments annually and causing differential tax burdens between property taxes on...

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